Paul Gogarty (Dublin Mid West, Green Party)
Link to this: Individually | In context

Question 159: To ask the Minister for Finance if he is satisfied that it is not possible to avoid the stamp duty depending on the way the sale of commercial property is structured; and if he will make a statement on the matter. [39077/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

Under the stamp duty code, liability to duty mainly arises where there is a conveyance or transfer of the legal title to certain property. It is the instrument of conveyance that is liable to stamp duty and it requires having a "stamp" impressed thereon.

The rates of stamp duty that are applicable to various instruments are set out in Schedule 1 to Stamp Duties Consolidation Act 1999. Historically, different rates of ad valorem stamp duty have applied to instruments transferring real property and those transferring stocks/ marketable securities (mainly shares). The rate of duty on the transfers of shares has remained at 1% since 1951, while the rate of duty on the transfer of real property has varied over the intervening years. The current rates for transfer of non-residential property are as follows:

Non-residential property is basically any property other than residential property, stocks or marketable securities or policies of insurance. It includes (but is not limited to) sites, offices, factories, other business premises, shops, public houses, land and goodwill attaching to a business.

If an instrument transfers the shares of a company, then the stamp duty rate is 1% of the value of the shares. This is the case whether all or part of the value of the shares derives from real property held by the company e.g. commercial buildings, offices, factories, lands etc. The purchaser of the shares will be a shareholder in a company that now owns the real property. General corporate law regards a company as having a personality distinct from its shareholder.